Merrill Lynch's loss much worse than expected, but...

"Right now we believe we are in a very comfortable spot in terms of our capital." So said John Thain, CEO of Merrill Lynch. He was addressing skeptical analysts who were blindsided by Merrill's massive $4.9 billion loss. (Analysts were expecting a loss of $1.8 billion.) The company wrote off $9.4 billion, again much more than expected. Analysts at most were expecting $6 billion. The "comfortable spot" may come off sounding naive if the firm is forced into more capital raising, which may well be likely. True, Merrill raised $6 billion by selling stakes in Bloomberg and Financial Data Services, and presumably it can still sell a portion of its lucrative BlackRock stake. Recall, however, that after Merrill Lynch raised nearly $13 billion earlier this year, Thain said new capital would not be necessary. Hopefully, we won't get a repeat.

For more:
- here's the New York Times article on Merrill Lynch

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